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$500M diesel refinery planned near Dickinson

A $500 million diesel refinery that may be built near Dickinson could produce a local source for consumers in western North Dakota, officials said Tuesday.

"The diesel that we produce should be (put) right back into the Bakken region," said Rick Matteson, director of communications and public affairs for Bismarck-based MDU Resources Group Inc., the project leaders.

Having a refinery nearby would be a bonus, said Steve Day, Stallion Oilfield Service operations manager in Dickinson.

"We're pulling this stuff out of the ground here," he said. "We might as well refine it here too, and maybe we drive the cost of fuel down a little bit."

The refinery would add approximately 100 jobs to the area, Matteson said. Day thought that may be one drawback.

"That's what we need is more jobs," Day said as he laughed. "We can't fill the ones we have right now."

The plant is expected to start operations in 2014.

Calumet is a producer of hydrocarbon products in Indianapolis.

The facility would process 20,000 barrels of oil per day, Matteson said. About half of that would be processed into diesel while the rest would yield by-products.

Fidelity Exploration and Production Co., MDU's oil and natural gas company, will produce some of the oil for the diesel.

MDU is interested in building the facility somewhere between Richardton and Belfield, Matteson said. MDU wants to keep the facility near Interstate 94 and the railroad.

"You got good proximity to transportation," he said. "It's relatively centered near the oil-production region."

There is a "tremendous" demand for diesel in an oil boom in western North Dakota, Matteson said.

"It's growing in agriculture and in the oil fields," he said. "The growth is outstripping the supply dramatically."

While the facility would not completely meet the demand for diesel, Matteson said it would help.

MDU's WBI Holdings Inc. would build the facility with Calumet Refining LLC, according to a press release.

The partnership would be a strong combination, said Jennifer Straumins, Calumet's general partner president and chief operating officer, in the release.

Calumet did not immediately return phone calls to The Press on Tuesday.